CA23166 | Plant and Machinery Allowance (PMA): First Year Allowance (FYA): Super-Deduction and Special Rate (SR) Allowance: Anti-avoidance

FA21/S14

Because FA21/S9 has effect as if it were contained in CAA01/PART2/CH4, the targeted anti-avoidance rules in CAA01/CH17 apply to the super-deduction and SR allowance. There is guidance about these rules in CA28000.

The CAA01/CH17 anti-avoidance rules are supplemented by an additional anti-avoidance rule in FA21/S14. Under this rule any relevant tax advantage that would otherwise be obtained as a result of relevant arrangements is to be counteracted by the making of just and reasonable adjustments.

“Tax advantage” is defined by CAA01/S577(4) CA11850.

A “relevant tax advantage” is a tax advantage connected with a super-deduction or SR allowance.

“Arrangements” include any agreement, understanding, scheme, transaction or series of transactions (whether or not legally enforceable).

Arrangements are “relevant arrangements” if both of the following conditions are met:

• the purpose, or one of the main purposes, of the arrangements is to obtain a relevant tax advantage

• it is reasonable, taking account of all the relevant circumstances, to do one of the following–

  • to conclude that the arrangements are, or include steps that are, contrived, abnormal or lacking a genuine commercial purpose

  • to regard the arrangements as circumventing the intended limits of relief under CAA01 or otherwise exploiting shortcomings in CAA01.

Adjustments under FA21/S14 may be made by way of an assessment, the modification of an assessment, the amendment or disallowance of a claim, or otherwise.